New Mexico Could See Cigar Tax Tripled

New Mexico Sen. Howie Morales, D-Silver City, is once again pursuing an increase to the state’s taxes on cigarettes and other tobacco products such as cigars, though this year he’s seeking a bigger increase than he did last year.

S.B. 231 is calling for an increase in the tax on cigars from 25 percent of the wholesale rate to 76 percent. In the case of a cigar with an MSRP of $9.50, that means the cost at the register would jump from $11.88 to $16.72, by halfwheel estimates. The move would give New Mexico the second highest cigar tax in the country behind Utah, which currently taxes tobacco products other than cigarettes at a rate of 86 percent of the wholesale price.

The bill also seeks an increase in the cigarette tax rate from $1.66 per pack of 20 to $3.16, and would add electronic vapor products to the definition of tobacco products for tax purposes, meaning they would be subject to the proposed 76 percent rate.

Monies from the increase would be directed to funding improvements to the University of New Mexico hospital and the cancer research and treatment center at the University of New Mexico Health Sciences Center, as well as other health related initiatives.

Morales’ previous proposal died in committee hearings. The new bill has been referred to the senate’s Committees on Corporations & Transportation and Finance.